Monday, February 24, 2014

In every market, agents will offer to work
on your behalf as a Buyer’s Agent (BA). The principal of being a Buyer Agent,
revolves around the concept of the Agent, REPRESENTING YOUR INTERESTS. In the
commercial market, their role and level of service (A.K.A.-
expertise) are significant if you are to successfully Buy or Lease a
property. A true BA agreement is a written contract,
between yourself and the agent. It is typically exclusive
(meaning you’re committed to the agent), runs for a set time period,
includes a brief description of the property sought (ie. search area, building
size), and sets out how fees are to be paid. Contracts will vary depending on
your jurisdiction, but should include the above points – and of course, can
be customized if necessary depending on your specific arrangement.

One of the most common ways a BA agreement
is amended, is with respect to the payment of fees. Typically an agreement
will set out what the fee amount is and that it may be paid by the Seller
-but if there is a deficiency for any
reason, this obligation would fall back to the
client (Buyer). This is a pure out-of-pocket expense to any Buyer, in addition to all
other closing costs, and one they may not wish to face. The fee provision in the
agreement then may be amended such that, the agent must receive full compensation
from the Seller and that any deficiency will not be the responsibility of the
Buyer. Keep in mind that typically on MLS listings, there is a provision for a
selling broker share on the commission being paid – meaning it should not be an issue on
an MLS generated sale.

Other exceptions might include:

·Can the Buyer buy out of the
search area, without affecting the BA agreement

·Can the agreement only apply to
MLS properties (and not Private Sales)

·Removal of a holdover clause
applying at the expiration of the contract period

(meaning – no
obligation after contract expires)

Are non-exclusive agreements available and
can they suit your purposes? Perhaps – but

in most competitive markets probably will
not serve you well.Most successful agentswill not work in this capacity, and are
unlikely to devote the time and energy if you are not fully committed to the relationship.

Even in its simplest form a BA agreement is
a contract and must be viewed as such. Best

practice here is to have your lawyer review
the agreement before signing it.

Next up – how to find the right Buyer Agent
candidate(s) in your market.

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Mark and Russel Lalovich

Lalovich Real Estate

Top producing Commercial Real Estate team in Windsor, Ontario. Please contact us for more info about our services by phone 519-966-0444, by email at russel@lalovichrealestate.com or visit our website at www.lalovichrealestate.com.

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